On March 8, Minister of Trade, Industry, and Energy Kim Jeong-gwan returned to Korea after concluding investment talks with the U.S. He reported that based on discussions, if Korea passes the special law for U.S. investment and implements the negotiated terms, it’s unlikely there will be any official announcements regarding tariff increases.
Speaking to reporters at Incheon International Airport upon his return, Minister Kim shared that he met with U.S. Secretary of Commerce Howard Lutnick to brief her on the National Assembly’s upcoming passage of the law next week. The U.S. expressed high appreciation and gratitude for this development.
On March 5, Minister Kim attended the opening ceremony of LG Energy Solution’s battery plant in Canada. He then engaged in efforts to support South Korea’s bid for the Canadian Patrol Submarine Project (CPSP), estimated at up to 60 trillion KRW (about 40 billion USD). Following this, he flew to the U.S. for talks with Secretary Lutnick on investment cooperation strategies.
Regarding U.S. investment projects, Minister Kim noted that while it didn’t discuss specific projects, it has substantive conversations about potential sectors and strategic directions.
In light of the U.S. Supreme Court’s ruling on mutual tariff violations, he added that they’ve kept open the possibility for South Korea to receive equal or even preferential treatment compared to the competitors, particularly concerning the 15% global tariff the Donald Trump administration is pursuing.
The Trump administration plans to raise the newly imposed global tariff from 10% to 15% following the Supreme Court’s decision. They’ve also announced investigations for additional tariffs under Section 232 of the Trade Expansion Act and Section 301 of the Trade Act.
Section 232 of the Trade Expansion Act allows the U.S. to impose tariffs or import restrictions on specific goods citing national security concerns. Section 301 of the Trade Act enables the U.S. to take action against other countries’ unfair trade practices.
Maximum Price Announcement System: Preparations Complete, Monitoring Market Conditions
Addressing the recent surge in domestic fuel prices and the potential implementation of a maximum price announcement system, Minister Kim stated that they’re prepared to respond to market conditions but will continue to monitor the situation closely before taking action.
The government is considering this fuel price cap in response to domestic fuel prices that have been rising sharply, even before the impact of Middle East tensions on global oil prices.
This system, which sets maximum retail prices for petroleum products, was last used in 1996. It hasn’t been activated since the liberalization of oil product prices in the early 2000s.
Critics warn that implementing such a system could lead to market distortions due to excessive government intervention.
In response, Minister Kim said that they’re aware of these concerns. Detailed information will be provided when it announces the decision.
Current law allows the Minister of Trade, Industry, and Energy to set maximum or minimum sales prices for petroleum products when deemed necessary.
Minister Kim also addressed the issue facing Yeocheon NCC, Korea’s largest ethylene producer, which declared it couldn’t supply products due to soaring naphtha prices amid Middle East tensions. He noted that petrochemical companies without refining operations appear to be impacted by the U.S.-Iran conflict, adding that it’ll soon announce measures related to naphtha supply.